Several major Engineering Procurement and Construction (EPC) companies signed contracts last week to build Kuwait’s $16-billion Al Zour oil refinery, which will more than double the nation’s crude processing capacity.

Daewoo Engineering & Construction Co., Tecnicas Reunidas and Hyundai Heavy Industries Co. are among companies that signed contracts to build the new refinery at Al Zour, about 90km south of Kuwait City for the state-owned Kuwait National Petroleum Company (KNPC).

When completed in 2019, the new refinery, with a capacity of 615,000 bpd, will raise Kuwait total refining capacity to 1.4 million bpd, said Mohammad Ghazi Al-Mutairi, CEO of KNPC at the signing ceremony in Kuwait City.

The Al Zour refinery, valued at KD4.87 billion ($16 billion) will be integrated with a planned petrochemical complex which KNPC will discuss at an upcoming board meeting, he said.

“Al Zour refinery is one of the world’s largest grass root plants being built from conceptual stage,” Al-Mutairi said. “Al Zour refinery along with other ongoing mega projects will change the landscape of the oil refining industry in Kuwait,” he added.

Al Zour’s construction has been planned since 2007, and was delayed by political disputes in parliament. The project is another move by oil producers in the Gulf Cooperation Council states to add value to their natural resources and diversify their source of income by processing crude at home after suffering revenue loss from lower oil prices since last year.

Heavy oil from new fields in Kuwait will be used at the refinery to produce low-sulfur diesel, 340,000 bpd of high-value light products and 225,000 bpd of fuel oil to feed power-generation plants in the country, Al-Mutairi said.

The refinery will be built in five packages, with the first valued at KD1.28 billion awarded to Technicas, Hanwha Engineering & Construction Corp. and China Petroleum & Chemical Corp., known as Sinopec, Khaled Al-Awadhi, KNPC project manager, said at the signing ceremony. Package one will build the main process units of the refinery.

The second and third packages at a combined value of KD1.75 billion were awarded to Fluor Corp., Daewoo and Hyundai Heavy Industries Co., he said. The two packages are meant to build support units and infrastructure services for the new project.

The fourth package valued at KD475 million was given to Saipem and Essar Oil, and the fifth package of KD454 million went to Hyundai Engineering & Construction Co., Saipem and SK Holdings Co., he revealed.

Package 4 consists of an EPC contract for the tankages, related road works, buildings, pipe racks, pipelines, water systems and control systems for the Al-Zour refinery. The Package 5 consists of an EPC contract for the offshore maritime export facilities for the Al-Zour NRP.

Both packages will be completed in 2019. Saipem will carry out work in partnership with Essar Projects Limited for Package 4 and with Hyundai Engineering & Construction and SK Engineering & Construction for Package 5.